A Tipping Point in 2025

A Tipping Point in 2025

Last Monday, the Wall Street Journal reported that January was the slowest month for M&A in the United States in a decade, with just under 900 deals announced. Key points from the article were that (a) CEOs and deal-makers are wary after several weeks of “whipsaw” action from Washington and (b) tariff threats have further dented business leaders’ confidence.

M&A in the design industry showed no such signs of a slowdown. There were 53 reported transactions in the first month of the year, on par with the 54 reported in January 2024 and right in line with the January deal counts for each year since 2020. Indeed, year-to-date reported deals are actually ahead of the same period last year (66 vs. 65) and also in line with the past five years. And looking at the moving 12-month average of deal announcements—which is at the heart of our M&A Update, the industry benchmark for deal activity—the pace of consolidation is up 6%. So, if there’s some pause in the larger M&A world, it’s not been felt yet in our industry.

However, we’ve been getting a LOT of questions about where we believe M&A—specifically deal activity—is headed in this first year of the new administration. Here’s our assessment of how things may pan out:

1. Supply-side drivers to remain strong: Leadership and ownership transition challenges for AE and environmental consulting firms are not going away this year, or any time soon for that matter. In fact, we expect to see…Read more